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End-to-end coverage. As a wholesaler and/or distributor, your job is the logistics of getting products where they need to be when they need to be there. You need an insurance policy that protects those products and your business every step of the way. Whether your company focuses on sourcing and getting the products into the hands of retailers who need them, supplying resellers and educating them on direct-from-manufacturer products or some combination of both, the risks you face are the same. Wholesale and distribution insurance coverage provides comprehensive coverage to manage those risks in the same way you oversee your shipments – by knowing what pitfalls lie ahead and navigating around them.
In this post, we explain what a wholesale and distribution insurance policy is and how it protects wholesale and distribution companies.
Key Information On the Wholesale and Distribution Industry
The Government of Canada defines wholesalers this way:
“Wholesale merchants buy and sell merchandise on their own account, that is, they take title to the goods they sell.
They generally operate from warehouse or office locations and they may ship from their own inventory or arrange for the shipment of goods directly from the supplier to the client.
In addition to the sale of goods, they may provide, or arrange for the provision of, logistics, marketing and support services, such as packaging and labelling, inventory management, shipping, handling of warranty claims, in-store or co-op promotions, and product training.
Wholesale merchants are known by a variety of trade designations depending on their relationship with suppliers or customers, or the distribution method they employ. Examples include wholesale merchants, wholesale distributors, drop shippers, rack-jobbers, import-export merchants, buying groups, dealer-owned cooperatives and banner wholesalers.”
And here are the latest stats from the Government of Canada regarding wholesale trade:
- There are approximately 100,131 wholesale trade businesses in Canada
- 97.7% of them have less than 100 employees
- Average annual revenue is $815,700 with 76% of wholesalers being profitable
- GDP increased by 0.8% in the last recorded year
- Net revenue in the wholesale trade industry was $49 billion with total expenses reaching $1 trillion in the last recorded year
What Does Wholesale and Distribution Insurance Cover?
The following are insurance coverages we recommend for wholesale and distribution companies: product liability insurance, commercial general liability insurance, property insurance, and more. Click on the links for more information about typical wholesale distribution insurance.
Product Liability Insurance to protect your wholesale and distribution company from manufacturing flaws, design defects etc. in the products you supply that may cause bodily injury and/or property damage to others.
Commercial General Liability Insurance which covers you in the event of bodily injury on your property and/or property damage to others, false advertising, libel/slander claims based on your business practices.
Property Insurance for your warehouse and/or office which protects them and the contents (i.e. stock/inventory etc.) inside them from perils such as fires, flooding, windstorms etc.
Accounts Receivable Insurance that protects your wholesale and distribution company’s profitability in case political unrest in a country you do business in leads to losses or a supplier or purchaser goes bankrupt, for example.
Cargo Insurance protects your business from losses stemming from loss or damage of cargo, stock throughput risks and supply chain/trade disruption, among several other shipping risks to cargo.
Commercial Auto Insurance / Commercial Vehicle Insurance for trucks and other transport vehicles.
Crime Insurance / Fidelity Insurance to protect your wholesale and distribution company from employee theft and other forms of fraud and dishonesty.
Cyber Liability & Privacy Insurance because more and more, every business needs to protect itself from the massive losses that can occur from a cyber breach.
How Much does Wholesale & Distribution Insurance Cost?
The important thing to remember when it comes to wholesale and distribution insurance is that it is customizable to fit your business needs. How much you pay for wholesale and distribution insurance will depend on a number of factors including:
- The type of products you sell
- Where your products are manufactured and by whom
- Where you sell your products to. ex. Canadian vs. US.
- How much inventory you keep on hand
- Annual sales
- Where your business is located
- Value of your building
- Physical features of the warehouse being used
- Attributes of the product
among other factors. You may want to speak with one of our business insurance specialists to go over the specifics of your wholesale and distribution business for a free quote.
ALIGNED, Business Insurance Experts Who Know the Logistics of Risk Management
Our advocates leverage their experience, knowledge and relationships with Canada’s top insurers to get your wholesale and distribution business seamless, end-to-end coverage at affordable rates. Get started by using our online tool or contact us for a free quote on wholesale and distribution insurance.
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